The King Carpet Company has $2,920,000 in cash and a total of $12,920,000 in current...
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The King Carpet Company has $2,920,000 in cash and a total of $12,920,000 in current assets. The firm's current liabilities equal $5,320,000 such that the firm's current ratio equals 2.4. The company's managers want to reduce the firm's cash holdings down to $1,040,000 by paying $504,000 in cash to expand the firm's truck fleet and using $1,376,000 in cash to retire a short-term note. If they carry this plan through, what will happen to the firm's current ratio?
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